Mortgages are offered by financial companies that are approved by the Federal Deposit Insurance Corporation (FDIC). Before each mortgage application is approved, it is required to undergo a standard due diligence process. This is intended to determine the risk of the borrower and the property. There is no guarantee that the property will be sold or the borrower will repay the loan. Depending on the risks, you may be asked to pay fees for this due diligence process.
According to companies like SoFi, the amount you pay may also depends on whether the loan is federally guaranteed, private, or some combination of the three. You can find out the lender of record of the mortgage you are interested in by looking at the property title.
Federal Mortgage Insurance Corp. (Fannie Mae)
A lender that insures mortgages on properties it manages. Fannie Mae and Freddie Mac are each run by independent government agencies and the private mortgage lenders they oversee are called FHLBs. To qualify as a mortgage lender, Fannie Mae or Freddie Mac requires that you:
Provide proof of $100,000 to $200,000 in assets in order to be eligible.
Not be under a government conservatorship.
Own your home outright.
Meet minimum loan-to-value (LTV) standards.
Federal Home Loan Bank and the Federal Housing Administration (FHFA) A third-party lender that insures and assists housing finance agencies. Both FHFA and the Federal Home Loan Bank are managed by separate federal agencies. In general, Fannie Mae and Freddie Mac are not affiliated with FHA or the National Housing Act. If you think you qualify for a Fannie Mae or Freddie Mac mortgage, you need to visit your nearest Fannie Mae or Freddie Mac office to get a full appraisal.
What if I have a federal mortgage?
If you have a federal mortgage, you will not qualify for a Home Equity Conversion Mortgage.
If you have a federal mortgage, you must apply for an FHA-insured, mortgage through the FHA and qualify for a mortgage on your first-lien home. You will be required to provide your Social Security number, driver’s license, or other government-issued photo ID. How is a home equity conversion mortgage different from a conventional mortgage? A conventional mortgage is the traditional loan for a first-lien home. FHA-insured home equity conversion mortgages are the lender’s option for a first-lien home that is over 80% paid in cash. It is also called a “down-payment loan” or “refinanced second mortgage.” A home equity conversion mortgage can be a better deal for you than a conventional mortgage because it provides a better rate of return.
Unlike the conventional mortgage, a home equity conversion mortgage has lower rates of interest on your loan.